Updated on 29 July 2024

HST in Canada can be a confusing subject. Applying for an HST number, charging the correct amount, deducting HST, remitting HST - each aspect comes with its own set of regulations and can differ from province to province.

If you have started a new business or are taking over responsibilities for HST charging and remitting, it’s imperative that you familiarize yourself with the ins and outs of how to manage your HST number.

The professionals at Accountor CPA have compiled the most commonly asked HST “how to” questions to help you navigate the system. Get everything you need to know about how to manage HST obligations in Canada.

How Does HST Work in Canada?

HST, or Harmonized Sales Tax, is a combination of the federal Canadian goods and services tax (GST) and provincial sales tax (PST). To date, five provinces have adopted HST:

1. Ontario
2. Nova Scotia
3. New Brunswick
4. Newfoundland and Labrador
5. Prince Edward Island

British Columbia briefly adopted HST in 2010 but returned to a GST/PST system in 2013.

Businesses operators are responsible for applying for an HST number in Canada if they make more than $30 000 per year in total revenue. When they apply for this number, they are then required to charge HST on the goods and services they provide (unless they are tax-exempt).

At the end of the business’ fiscal year, they must file an HST return with the Canada Revenue Agency (CRA) to declare the HST they charged in that year. They are responsible for paying, or remitting, that HST back to the government. Reductions are available in the form of expenses of the business and other tax credits.

An HST return must be filed every year and HST remittance must be paid by the specified deadlines.

How Much Is HST in Canada?

The total amount of HST differs from province to province, with different amounts for the provincial and federal rates. Below are the HST rates for the five provinces in Canada that have adopted HST.

How to Get an HST Number?

How to apply for an HST number in Canada is a simple process. You will need the date of registration (the date you stop being a designated small supplier and make more than $30 000 in revenue), your chosen fiscal year for HST purposes, your total annual revenue, and basic business information.

You can register for an HST number online, by mail, by fax, or over the phone. To do it online, simply visit the Business Registration Online portal with the CRA. You will immediately be given your HST number upon completion.

How Much Does It Cost To Get An HST Number?

Getting an HST number through the CRA has no cost. If you choose to work with a tax accounting firm to file for you, there may be a small service fee.

How Do I Find My HST Number?

An HST number is made up of three parts. The first nine digits are the same as your Business Number (BN). The next two letters are the program identifier to specify what kind of account it is. HST numbers are usually “RT”. The third part is the reference number, to differentiate between different accounts under the same BN and program identifier. It is in a 4-digit format, usually 0001, 0002, etc.

An HST number might look like: 123456789RT0001.

The best way to find your HST number is to look at your relevant tax forms. It will be noted on previous years’ HST returns. If you cannot find paperwork, you can contact the CRA at 1-800-959-5525 to get your number or create a new one.

How To Find the HST Number of a Company?

If you need to confirm an HST number provided to you by another company (like a supplier), you can verify it through the CRA. Use their GST/HST Registry Search to confirm that the number you were provided with is correct.

If you need to confirm an HST number that was not provided, you can contact the CRA to confirm if the company is registered.

How to Deduct HST from Total?

To deduct HST from the total price on a receipt, you use the following formula:

(Price x HST rate) / (100 + HST rate) = HST Amount

You can then divide this HST amount by the HST rate and multiply it by the provincial and federal rates to get the full breakdown.

For example, a purchase made in Ontario of $400:

($400 x 13) / (100 + 13) = $46.02

$46.02 / 13 = $3.54

$3.54 x 5 = $17.70 (federal portion)

$3.54 x 8 = $28.32 (provincial portion)

The same can be done for the other provinces using HST with a rate of 15% and a 10% and 5% breakdown.

How To Remit HST?

When you file your HST return, you will know how much HST you must remit to the government. Generally, you must remit HST at the same time as you file your return. In some situations, you may have monthly or quarterly installments. Your due date to remit HST is stated at the top of Form GST34-2.

For a detailed deadline schedule, visit the Canada Revenue Agency.

There are 3 ways to pay your HST remittance:

1. remit electronically
2. remit at your financial institution in Canada
3. send your payment by mail

Payments of $50 000 or more must be paid electronically or at your financial institution.

It is recommended to remit electronically using the CRA’s My Payment option online.

How to Back Out HST?

Because British Columbia returned to a GST/PST system in 2013, in some situations, you may have to back out HST. This was a common issue when British Columbia first changed from the HST system as many businesses and individuals had receipts showing HST, but now is less of a common issue.

Because HST was 12% in BC, the formula used is:

Price x 12 / 112 = HST

If the receipt which includes the HST in the price totals $366, the formula would be:

$366 x 12 / 112 = $36

The original price before HST would be $330 and the HST would be $36.

How to Close HST Account?

To close your HST account, you will need all of the following information:

1. Business number
2. Legal name of the business
3. Cancellation date
4. Reason for closing

Once you have this information, you can either contact the CRA by phone at 1-800-959-5525 or fill out Form RC145, Request to Close Business Number Program Accounts, and file it with the CRA.

After your account is successfully closed, you must determine the HST owing at the time of closing. For more information, visit the Canada Revenue Agency.

If you need further assistance with your business’ HST number or remittance, the experts at Accountor CPA can help. We offer GST / HST return filing services and application assistance to help you ensure you are remitting the correct amount and meeting appropriate deadlines.

Contact us for a free consultation.

FAQ

What is the process to apply for an HST number in Canada?

You can apply online via the Business Registration Online portal, by mail, by fax, or over the phone. You’ll need your business details, total annual revenue, and the date you exceeded $30,000 in revenue.

Do I need to pay any fees to get an HST number?

Applying for an HST number through the CRA is free. However, if you use a tax accounting firm, there may be a service fee.

How can I find my HST number if I’ve lost it?

Your HST number is on tax forms and previous HST returns. If lost, contact the CRA at 1-800-959-5525.

How do I verify another company’s HST number?

Use the CRA’s GST/HST Registry Search to confirm the validity of an HST number provided by another business.

Can I claim input tax credits (ITCs) for HST paid on business expenses?

Yes, you can claim ITCs for HST paid on eligible business expenses, reducing your overall tax liability.

How do I remit HST to the government?

You can remit HST electronically, at a financial institution, or by mail. Payments over $50,000 must be made electronically or at a financial institution.

What should I do if I need to close my HST account?

Provide the CRA with your business number, legal name, cancellation date, and reason. Use Form RC145 or call 1-800-959-5525 to close the account.